The European technology sector lacks drive and innovation when starting up new firms, it has been claimed.

Venture capitalists pump only one-fifth as much into start-up companies in Europe they do in the United States, and the founder and chief executive of Luxembourgbased Skype said the reason for slow activity was tough conditions.

"We want our vacations and our social luxuries. This is not the best environment to start a company.

"It is much more difficult here than in the United States or China," said Niklas Zennstrom.

Skype, which has found 39 million users for its free software for internet voice calls, sees itself as an exception in the relatively empty European technology landscape.

Other executives say that appetite for innovation and technology is also modest.

Capgemini chief executive Paul Hermelin said his company, Europe's biggest computer consultancy, sees a lot more interest from the United States than from Europe in SAP's latest software system, NetWeaver.

"In old Europe, there's less appetite for innovation," he said.

"In Europe, for a long time, IT was mostly about cost cutting and productivity.

"To associate IT with new markets, new products, that is more the United States than European thinking."

He also said that fastgrowing areas of informationtechnology services, such as outsourcing, were able to take off earlier in the United States because firms there did not have to worry about labour unrest.

"In Europe, people were thinking: 'I have seven problems with the unions. Why add another?'

"In the US there's more appetite to use IT as a growth leader. French car makers Renault and Peugeot are proud they spend the lowest percentage of sales on IT.

" That's the European approach. I'm not sure that's what Toyota would say," he said.

Ironically, the car industry is one of Europe's few technology-intensive sectors that is leading in the world.

Wolfgang Ziebart, chief executive of German chipmaker Infineon, said governments could help.

"What is required here in Europe are more lead markets. Politicians can do a lot to help create lead markets," he added.